of even ordinary negligence in continuing | failure to perform a manifest duty, in reckupon his course upon that assumption.

This court has held that, where plaintiff's negligence contributed to his injury, he can- The complainant and J. W. Martin and not recover "without intentional wrong" on George F. Brondige made an agreement, unthe part of the defendant. Williams v. Mich- der and according to which Martin was to igan Central R. R., 2 Mich. 259, 55 Am. Dec. go to Calumet, Mich., and procure, if pos59. "Without wanton or intentional wrong."sible, a gas franchise in Calumet and Lake L. S. & M. S. Ry. Co. v. Miller, 25 Mich. 274. Linden, the expenses of the adventure to be "Unless the defendant was guilty of such borne equally by the three, and the profits, reckless and wanton negligence" as would ac- if any, to be divided equally. Later a fourth quit the plaintiff. Freeman v. Railway Co., person became a party to the agreement. 74 Mich. 86, 41 N. W. 872, 3 L. R. A. 594. The community known generally as Calumet "Gross negligence" means "the intentional is in fact three separate municipal bodies, *For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes

"Sec. 11. All the requirements and obligations upon the grantee, his associates, successors or assigns, by this ordinance are made conditions hereof, for breach of any of which all rights conferred by this ordinance may be forfeited by the said common council, provided that such forfeiture shall not take place if within ninety (90) days after notice given by or under the direction of said common council to said grantee, his associates, successors or assigns, they shall comply with the conditions or terms or perform such obligations for breach of which, or default in which such notice is given."

including the village of Red Jacket, the village of Laurium, and a part of the township of Calumet. While negotiations for a franchise in Red Jacket were pending, and to meet a query made by some of the officers of the village as to the financial ability of Mr. Martin and his friends, the complainant drew, had certified, and delivered to Mr. Martin, who, in turn, delivered it to the village clerk of Red Jacket, a check for $1,000, in words and figures as follows: "Rochester, Mich., Sept. 28, 1904. The Bank of Rochester, Unincorporated. Burr and Newberry, Bankers. Pay to the order of the village of Red Jacket $1,000.00 one thousand dollars. [Signed] Albert G. Griggs. Certified, Burr & Newberry, Sept. 28, 1904." The record of the proceedings of the common council of Red Jacket of the meeting held October 4, 1904, contains the following: "A rider to the gas franchise of J. W. Martin relative to flat rate of $1.25 per 1,000 cubic feet, together with a certified check for $1,000 on the Bank of Rochester, Mich., was presented. Motion by Wickstrom that rider be attached to franchise, and that certified check be placed in the hands of the Village Clerk, until and pending the action on the franchise. Carried." November 1, 1904, a franchise was granted to Joseph W. Martin, his associates, successors, or assigns. By its terms the ordinance was to take effect upon the filing with the clerk within 90 days of a bond in the sum of $1,000 and the accept-ceived a letter in which he states, in subance of the grantee thereof in writing, and, if the acceptance and bond were not filed within 90 days, the ordinance was to become void and of no effect. It contained also the following:

"Sec. 2. The said grantee, or his associates, successors or assigns, shall begin the work of laying the gas mains and pipes in said village May first, after the date of the filing of the acceptance of this ordinance by the grantee, as hereinafter provided, and September 1st, after the filing of such acceptance, shall have completed and in operation a system furnishing gas as herein contemplated, to an extent sufficient to supply both sides of Fifth, Sixth, Oak and Pine streets therein, and in case said work is not begun within said time, or shall not be completed to the extent aforesaid and within the time above limited, all rights hereunder shall be forfeited and all the privileges hereby conferred shall cease, unless the common council shall by resolution extend such limitations. And the said grantee, his associates, successors or assigns, shall file with the clerk of said village, at the time of filing his acceptance of this ordinance, a bond in the sum of one thousand dollars ($1,000.00) to the said village of Red Jacket, with sufficient sureties to be approved by the council, conditioned that they will commence and complete said work to be performed as above, within the time to be specified in this sec

December 24, 1904, Mr. Martin sent a communication to the mayor and common council, reading: "I hereby accept gas ordinance granted me by your Hon. body, and you hold our certified check of $1,000 (one thousand dollars), which we agree to forfeit to the village of Red Jacket if we do not live up to every letter of said gas ordinance." The communication was signed, "Joseph W. Martin." Later Martin indorsed his acceptance upon a copy of the ordinance, which also bore the signature of the village by its proper officers. November 7, 1905, Mr. Martin requested an amendment extending the time for beginning the work until May 1, 1906, and for the completion of the system until September 1, 1906. The request was refused. October 11, 1905, the complainant wrote to the clerk of the village, and the clerk re

stance, that it was impossible, for reasons which are mentioned, to successfully finance the deal; that he is assured that the council did not intend to "hold any one up in this matter," and asks a return of the certified check in order to release the funds tied up thereby. The letter contains this sentence: "You will readily understand that the depositing of the check could scarcely be termed a compliance with the terms of the franchise, and as I wish to secure the release of the funds represented by the check, I make the above request." The clerk answered this letter, promising to take the matter up with the mayor, and saying that some action of the council would be necessary before the request could be complied with. On October 19, 1905, Mr. Martin wrote to the mayor and common council of the village of Red Jacket, requesting that they make no disposition of the $1,000 certified check "deposited as a guarantee in the gas matter of the Copper Range Gas Company, until such time as the question is fully settled in Calumet. I supposed that check was put up in good faith & want it to stay there & it may be that in the near future your Hon. body will secure for your constituents that which you and they have tried so hard for-an up to date gas plant, with a reasonable rate. Trusting these lines will meet your entire approval, I am." Again, July 9, 1907, Martin wrote to the president of

the fact that the council held a certified | check was transferred to Ryan upon the check that he deposited with the village written order of Martin, who had deposited clerk for $1,000, that the plant was not built, the check; that complainant had no transbut that he saved the Calumet people many actions with the village. The First National dollars by the low rate which his hard work Bank of Calumet claimed in its answer that made it possible for the community to get; it was the lawful holder and owner of the I that, if his associates had done as they check, that it bought it of Ryan, and paid agreed, he would have built the plant. He him for it, in due course of business. It then requests the Red Jacket common coun- appears that in February, 1906, Mr. Ryan, cil to indorse the certified check in favor of formerly, and when the franchise was grantMr. John R. Ryan, "and with the low rate ed, president of the village, wrote to comfor gas that the village has in the face of plainant, stating that the council had decidwhat they were about to pay for & Mr. John ed to keep the thousand dollars, but sugR. Ryan paid in full I feel that only justice gesting that he might be able to get the will be done." The check was later deliver- check from the village, pay the indebtedness ed to John R. Ryan, with the following in- of Martin to himself, and turn the balance dorsement: "Pay to the order of John R. over to Griggs. Complainant did not conRyan, Calumet, Mich.-Village of Red Jack- sent to this. When the check was turned et, per N. F. Kaiser, Village Clerk." Mr. over to Ryan, he gave a receipt to the vilRyan deposited it August 14, 1907, with oth- lage, hereinafter set out, and the village er checks and cash in the National Bank of clerk wrote Martin, advising him that the Calumet, and it appears that he checked check had been turned over to Ryan, and against his account an amount sufficient to that the check had been forfeited for failwithdraw from the bank the credit balance ure to comply with the conditions of the thus created, and his checks were paid. In franchise. It is said that the action on the the usual course of business the certified part of the clerk was authorized at an incheck was forwarded for collection, payment formal meeting of the council, held in Auwas refused by the certifying bank, and the gust, 1907, of which meeting no record was check was returned to the First National made. The receipt was spread upon the Bank of Calumet. Complainant, the drawer minutes of the council at a meeting held of the check, filed his bill in the circuit September 3, 1907, and on October 1st folcourt for the county of Oakland, in chan- lowing, at a regular meeting of the council, cery, naming as defendants the village of these minutes, as the record indicates, were Red Jacket, John R. Ryan, Charles A. Burr, read and approved. The record made in Arthur F. Newberry, copartners as the Bank the council proceedings of September 3d was of Rochester, praying, among other things, the following: "Assignment of the $1,000 that he be decreed to be the owner of and certified check deposited by J. W. Martin entitled to the possession of the check, that et al. to J. R. Ryan, the action of the vilit be ordered delivered up to him to be can- lage clerk pertaining to the assignment of celed, that the defendants the village of Red the $1,000 certified check, and as noticed in Jacket and John R. Ryan be restrained from the following receipt was declared ratified attempting to collect, assign, negotiate, or and approved: 'Calumet, Mich., Aug. 13, dispose of the said certified check, and that 1907. Received of the village of Red Jacket, Burr and Newberry be enjoined from pay- Mich., certified check on the Bank of Rochesing the same to any person other than com- ter, Unincorporated, Burr and Newberry, plainant. Later, the bill of complaint was Bankers, in the sum of one thousand dollars amended by making the First National Bank ($1,000.00), dated at Rochester, Mich., Sepof Calumet a party defendant. Each of tember 28th, 1904, signed by Albert G. Griggs, said defendants answered the bill. No de and made payable to the village of Red Jackfendant asks for affirmative relief against et, and bearing certificate as follows: "Cercomplainant or against any other defendant. tified, Burr and Newberry, Bankers, SepIt is asserted in the answer of defendant tember 28, 1904." Said above-described check Ryan that the village of Red Jacket indorsed was indorsed as follows: 'Pay to the order the check and delivered it to him upon the of John R. Ryan, Calumet, Mich. Village written order of Joseph W. Martin, who was of Red Jacket, per N. F. Kaiser, Village the person who deposited it with the vil- Clerk.' This certified check was made paylage. He proceeds to set out the facts con- able to John R. Ryan at the instance of cerning an indebtedness due and owing to Joseph W. Martin, of Detroit, Mich., in lethim from said Martin, amounting to upwards ter of said Joseph W. Martin, dated July 9th, of $800, to pay which, he alleges, the check 1907, on file in the village of Red Jacket was transferred to him. He negotiated the clerk's office, and is the identical check decheck, he says, to the First National Bank posited with the village clerk of the village of Calumet in due course of business; the of Red Jacket by the said Joseph W. Maramount thereof being placed to his credit tin as a guarantee of good faith in the matby the said bank and withdrawn by him. ter of complying with the conditions of a The answer of the village of Red Jacket, certain gas franchise granted to the said signed by its solicitor, also asserts that the Joseph W. Martin by the village of Red

for which it was deposited-in lieu of a bond. We further contend that the check was automatically forfeited by the failure on the part of the complainant and his associates to construct the plant, and that whether the village of Red Jacket collected the check and turned the money into the treasury or turned the check over to Mr. Ryan is a matter in which the complainant is not concerned. Nor does the fact that the council immediately acted upon an order given by Martin detract in any way from the strength of this position. If the council for its own protection acted in pursuance of an order from Martin, the person by whom

Jacket on the 1st day of November, 1904, and which said check was forfeited for failure of the said Jos. W. Martin to comply with the conditions of said franchise. [Signed] John R. Ryan, Calumet, Mich." This record was not made by order of the council. No motion was made, no resolution passed, concerning it. The court below found that it was the understanding that the check should be held by the village in lieu of a bond; that Ryan was not a bona fide holder of the check, having taken it for an antecedent indebtedness; that the First National Bank of Calumet had no knowledge of the purpose for which the check was given, but claimed to have received it for collection the check was deposited, rather than upon only, which fact and the age of the check were sufficient to put the bank upon inquiry; that the turning of the check over to Ryan was unauthorized; and that no formal action was taken by the village to forfeit the check. But the court was of opinion that the village was entitled as against complainant to hold the check as stipulated damages for nonperformance of the franchise obligations, and that its action in indorsing the check to Ryan could not be questioned by complainant, a nonresident of the village, and not a taxpayer therein. It was suggested by the court that the answers be amended so as to lay the ground for such a defense. Accordingly the village amended its answer, asserting therein the right of the village to hold said check as liquidated damages for failure of the franchise grantee to comply with the terms of the franchise. The bank and Ryan also amended their answers. A decree was entered dismissing the bill of complaint.

its own legal right (at least as against Griggs) as the owner of a forfeited check, it does not follow that the complainant can take advantage of this course on the part of the village. The village of Red Jacket was not bound at its peril to determine whether the check was actually forfeited. If the council was willing that the defendant Ryan should have the check in payment of Martin's indebtedness to Ryan, it was an element of additional safety, as far as the village was concerned, to depend, not only upon the forfeiture of the check, but also upon the order of Martin. In any event, the complainant is in no position to complain of the action of the council. He saw fit to have his check certified and placed in the hands of his agent, whom he said had full authority to represent him. He cannot complain if his agent was able to secure with a forfeited check the payment of an indebtedness incurred in and about the promotion of the enterprise. The check was properly forfeited as liquidated damages on account of the failure of the grantee, Joseph W. Martin, to perform the conditions of the grant." Argued before MOORE, C. J., and STEERE, MCALVAY, BROOKE, BLAIR, STONE, and OSTRANDER, JJ.

Aside from the question of the bona fides of the First National Bank of Calumet, the position of defendants is well stated in the brief filed for all of them, as follows: "Of the action of the clerk in turning the check over to John R. Ryan, Joseph W. Martin had due notice. Before the clerk turned the Lillis & Hymers and George A. Safford, all check over to Mr. Ryan, he was ordered to of Pontiac, for appellant. P. H. O'Brien, of do so at an informal meeting of the council | Laurium, W. J. Galbraith, and W. J. Macat which the president and all the council Donald, both of Calumet, for appellees. were present. They all acquiesced in this course, and at the next regular meeting, OSTRANDER, J. (after stating the facts which occurred on the 3d of September, 1905, as above). It is immaterial, in the view I the action of the clerk in turning the check take of the case, whether there was or was over to Mr. Ryan was fully ratified and af- not a mutual understanding of the village firmed. So, if any affirmative action of the and the grantees of the franchise that the council was necessary, such action was had. certified check was to be left with and held It may have been irregular, but, if it was ir- by the village in lieu of, or in the place of, regular, Mr. Griggs has no right to complain the bond which the ordinance required to be in regard to it. If the check was forfeited, given. If the check was not so received and it makes no difference to him what the de- so relied upon, it should have been returned tails were about the manner in which the to the maker upon his request. If it was so council affirmatively took action looking to- received, the right of the village was to forward declaring the check actually forfeited. feit it and collect it. Perhaps an authorized However, we contend that all of the circum- attempt to collect it would be sufficient evistances demonstrate that the village of Red dence of an intention to forfeit it to the Jacket accepted and retained the check in village. This question, however, is not for

to the conclusion reached by the learned trial judge that complainant has in any event no interest in the check and the fund evidenced by it. He had the right to have the check and fund used for the purpose for which the check was made and deposited. When he filed his bill, it appeared that it had been diverted, and that the village had never asserted the right to keep it as its own. The village does not now assert the right to have the check restored to it and to then proceed to forfeit it and to recover its damages. It declines, upon this record, to pursue the check or the fund.

had the right to forfeit the check as liqui- | Not only has it not forfeited it, but upon dated damages, it has not done so, and more this record, by its original answer, it disthan six years has elapsed since its right ac- claimed ownership, and by its amended ancrued. The check is not in the possession swer has declined to ask for any relief. or control of the village. Clearly, the com- I do not mean to intimate that the action mon council would have no right to give the of the clerk and councilmen which has been check away by formal or informal action, referred to was sufficient to divest the viland whether it belonged to the village or to lage of its property, if it claimed the check complainant. I reject, as unsupported, the as property. But the last statement from claim that any one supposed that Mr. Mar- the village in its answer and the argument tin had the right to use the check to pay his made in its behalf are calculated only to private debt to Mr. Ryan. Complainant, the perpetuate a fraud upon either the village drawer of the check, was known to Ryan or the complainant. The extent to which the and to the village authorities as a person answers of the village, signed only by its interested in the gas franchise. He was one solicitor, may be held binding upon the vilof the associates of Martin. The check was lage, is not discussed in the briefs, and I drawn and certified to be held by the payee shall not consider the proposition. The vilthereof for a special purpose. Martin was lage is not in possession of the check. It never a transferee of the check. It is clear does not appear that it ever will have the that Mr. Ryan knew all of the circumstanc-possession and control of it. I do not agree es. He had asked complainant, the drawer of the check, to consent to have it used to pay Martin's debt. The village authorities had been requested by the drawer of the check to return it to him. They were informed by Martin that he wished the aid and co-operation of the village to pay his debt to Ryan. He received such aid and co-operation; Ryan being active in that behalf, and the beneficiary thereof. The First National Bank of Calumet received the check with notice that it had been drawn and certified for three years, was payable to a municipal corporation, and was indorsed by the clerk of the municipality. The clerk of the village had no general power to transfer checks, certified or other, payable to the village. The treasurer of the village is the custodian of its money and evidences of value. 1 Comp. Laws, §§ 2731-2738. The question is not whether there was mala fides in accepting a check apparently good properly transferred. It is whether the payee of the check appeared to have indorsed it. authority of the clerk to make the indorsement was not apparent, and did not, in fact, exist. Beyond this, there is testimony strongly tending to prove that the bank took the check for collection, relying upon the indorsement of Ryan and his responsibility, and did not take it as a transferee, for value. I conclude there are no innocent transferees of the check whose rights are to be protected. We have then this situation: No party in interest, excepting the complainant, seeks affirmative relief. The check, the subjectmatter of the controversy, is held by one who has no right as against any one but Ryan to collect it. Complainant created the fund to pay the check, which he drew and deposited for a special purpose with the village authorities. The check has been wrongfully diverted. Either the village or the complainant is entitled to its possession and to the fund created to pay it. The village has never claimed it, has taken no steps to forfeit it.

The

Under the circumstances, I see but one course to pursue, which is to grant complainant the relief prayed for in his bill, leaving the village to its remedy against those who participated in the diversion of its property.

The decree below is reversed and a decree will be entered in this court for complainant, with costs of both courts.

BLAIR, J., being ill, takes no part in this decision.

MACOMBER v. COTTRELL et al.
(Supreme Court of Michigan. July 22, 1912.)
COMPROMISE AND SETTLEMENT (§ 19*)-RE-
SCISSION FOR FRAUD.

Where complainant compromised his claim arising out of a contract which he was induced to enter into by alleged fraudulent representations, of which he claimed to have proof, he could not make the same fraudulent representations the basis of a bill in equity to set aside the compromise agreement, though he did not at the time of the compromise have the proof claimed, but obtained it subsequently.

[Ed. Note.-For other cases, see Compromise and Settlement, Cent. Dig. §§ 67, 71-75; Dec. Dig. § 19.*]

Appeal from Circuit Court, Macomb County, in Chancery; Henry J. McKay, Judge. Bill by Allen Macomber against George

For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes